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HomeMy WebLinkAboutRES NO 12-94RESOLUT UN I 2 - 9 4 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAKERSFIELD PROVIDING FOR ISSUANCE OF REFUNDING BONDS AND AWARDING SALE OF REFUNDING BONDS IN CONNECTION WITH THE CITY OF BAKERSFIELD ASSESSMENT DISTRICT NO. 86-2 (SERIES I -- TAX EXEMPT) RESOLVED BY THE CITY COUNCIL (the "Council") OF THE CITY OF BAKERSFIELD (the "City") as follows: WHEREAS, on January 12, 1994, the Council adopted its Resolution of Intention No. 1114 (the "Resolution of Intention") to levy reassessments, and to issue refunding bonds upon the security thereof, within an assessment district generally known as City of Bakersfield Assessment District No. 86-2 (the "District"), under and pursuant to the Refunding Act of 1984 for 1915 Act Improvement Bonds (being Division 11.5, commencing with Section 9500, of the California Streets and Highways Code) (the "1984 Refunding Act"); the Resolution of Intention is hereby referred to for further particulars; and WHEREAS, the refunding bonds are to be issued in two separate series, one series to be tax-exempt and allocated to refund tax-exempt prior bonds, and one series to be taxable and allocated to refund taxable prior bonds; and WHEREAS, as set forth in Resolution No. ]q-~q , adopted by the Council on January 12, 1994, the Council has duly considered the written report dated January 12, 1994, prepared in connection with the proposed refunding and reassessment pursuant to Section 9523 of the 1984 Refunding Act (the "Reassessment Report"), has made the findings required by Section 9525 of the 1984 Refunding Act, and has approved, confirmed and adopted the Reassessment Report and the reassessment and reassessment diagram(s) presented therewith; and WHEREAS, the reassessment diagram(s) and a notice of reassessment have been duly recorded in the manner provided by law, and the reassessments and interest thereon shall be collected on the assessment roll for the City in the same manner and subject to the same remedies on default and to the payment of interest and penalties on the enforcement thereof as the original assessments of the District; and WHEREAS, the Council is now authorized under the 1984 Refunding Act to authorize, issue and sell the refunding bonds; 1/11/94(1362.4) ORtG~N~L THEREFORE, THE COUNCIL FINDS, DETERMINES AND ORDERS AS FOLLOWS: SECTION 1. Definitions. Unless the context otherwise requires, the terms set forth below shall, for all purposes of this Resolution, have the meanings specified in this Section 1. These definitions shall be equally applicable to both the singular and plural forms of any of such terms. "Aqent" means the transfer agent, registrar and paying agent appointed pursuant to Section 28 of this Resolution. "ArbitraGe Bonds" means each and all bonds in an issue when any portion of the proceeds of the issue is reasonably expected (at the time of issuance of the bond) to be used directly or indirectly (i) to acquire Higher Yielding Investments, or (ii) to replace funds which were used directly or indirectly to acquire Higher Yielding Investments. A bond which was not an Arbitrage Bond at the time it was issued can become an Arbitrage Bond if the issuer or a person acting on behalf of the issuer deliberately and intentionally uses any portion of the proceeds of the issue of which such bond is a part for one of the purposes described in (i) or (ii) above. "Authority" means the Bakersfield Public Financing Authority. "Bond Counsel" means the law firm of Burke, Williams & Sorensen, Fresno, California. "Bond Date" means the dated date of the Series I Bonds, which shall be determined by the city and the Authority and established by the purchase contract for the Series I Bonds identified in Section 26 hereof. "Bond Denomination" means the amount of $5,000, which is the minimum amount in which the Series I Bonds may be issued, except that one Series I Bond, due on September 2, 1994, will include the amount, if any, by which the principal amount of the Series I Bonds exceeds the largest integral multiple of $5,000 contained in such issue. "Bond Year" means the twelve-month period beginning on September 2 of each year and ending September 1 of the following year, except that the first Bond Year shall begin on the Closing Date and end September 1, 1994. "Bonds" means, collectively, the Series I Bonds and the Series II Bonds. "Certificate re ArbitraGe and HedGe Bonds" means the certificate with respect to the Series I Bonds executed by an 1/11/94(136Z.4) 2 ORIGI~AL officer of the City as of the Closing Date concerning compliance with Sections 148 and 149 of the Code, as such certificate may be amended or supplemented in accordance with its terms. "city" means the City of Bakersfield, California, the issuer of the Series I Bonds. "Clerk" means the City Clerk or the Deputy City Clerk to the City. "Closinq Date" means the date upon which there is an exchange of the Series I Bonds for the proceeds representing the purchase price of the Series I Bonds by the Original Purchaser. "Code" means the Internal Revenue Code of 1986, as amended. "Costs of Issuance" means all applicable costs and expenses incident to the calling, retiring or paying of the Tax- Exempt Prior Bonds and to the issuance of the Series I Bonds, including, but not limited to: (i) underwriters' fees, if any (other than those taken in the form of a discount on the Closing Date); (ii) underwriters' fees, as well counsel fees, if any, including Bond Counsel, counsel, city's counsel and special tax counsel as any other specialized counsel fees; (iii) financial consultant fees, if any; (iv) rating agency fees, if any; (v) charges of the escrow agent or trustee, if any; (vi) paying agent and certifying and authenticating agent fees, if any; (vii) certified public accountant fees, if any; (viii) printing and advertising costs, if any, of the series I Bonds and of any preliminary and final official statements; (ix) accrued and unpaid interest, if any, on the Tax-exempt Prior Bonds; (x) any premium necessary in the calling and retiring of the Tax-exempt Prior Bonds; (xi) City administrative expenses; 1/11/94(1562.4) (xii) costs of engineering and feasibility studies necessary to the issuance of the Series I Bonds; and (xiii) amounts, if any, the City has paid or transferred, either from a special reserve fund or from surplus funds, into the redemption fund for the Tax-exempt Prior Bonds, and any penalties and interest thereon, provided such amounts, penalties and interest have been included in and limited to the particular reassessments levied on those subdivisions of land in the District securing original assessment installments which are delinquent and for which the payments or transfers have been made. "Costs of Issuance Fund" means the special fund established by the Treasurer pursuant to Section 10 of this Resolution for payment of Costs of Issuance of the Series I Bonds. "County" means the County of Kern, California, the county in which the City is located. "Debt Service" means the scheduled amount of interest and principal payable on the Series I Bonds or the Series II Bonds, as the text indicates, during the period of computation, excluding amounts scheduled during such period which relate to principal which has been retired before the beginning of such period. "District" means the City of Bakersfield Assessment District No. 86-2. "Escrow Fund" means the separate fund into which a portion of the Sale Proceeds of the Series I Bonds will be deposited pursuant to Section 9 of this Resolution and the Escrow Agreement dated as of the closing Date, between the City and Bank of America, National Trust and Savings Association, as escrow agent. "Federal Securities" means those securities described in Sections 1360 and 1360.1 of the California Financial Code and includes United States Treasury notes, bonds, bills or certificates of indebtedness, or obligations for which the faith and credit of the United States are pledged for the payment of principal and interest, including the guaranteed portions of small business administration loans so long as the loans are obligations for which the faith and credit of the United States are pledged for the payment of principal and interest. "Gross Proceeds" means the Proceeds and the Replacement Proceeds, if any, of the Series I Bonds. "Hiqher Yieldinq Investments" means any Investment Property which produces a yield over the term of the Series I Bonds which is materially higher than the yield on the Series I Bonds. 1/11/94(1362.4) 4 "Interest Pavment Date" means each date upon which interest on the Series I Bonds is payable, commencing on September 2, 1994, and semiannually thereafter on March 2 and September 2 of each year to maturity. "Investment Proceeds" means any amount actually or constructively received from investing the Proceeds of the Series I Bonds. "Investment Property" means any security (within the meaning of Sections 165(g) (2) (A) or (B) of the Code), any obligation (other than a tax-exempt bond unless such bond is a "specified private activity bond" within the meaning of Section 57(a)(5)(C) of the Code), any annuity contract or any investment-type property. "Net Sale Proceeds" means the Sale Proceeds of the Series I Bonds less the portion of such Sale Proceeds invested in a reasonably required reserve or replacement fund, if any, and as part of a minor portion (i.e., the lesser of five percent of the Sale Proceeds or $100,000). "1984 Refunding Act" means the Refunding Act of 1984 for 1915 Improvement Act Bonds, Division 11.5 of the california Streets and Highways Code. "1915 Act" means the Improvement Bond Act of 1915, Divi- sion 10 of the California Streets and Highways Code. "Nonpurpose Investment" means any Investment Property in which Gross Proceeds of the Series I Bonds are invested that is not a Purpose Investment. "OriGinal Purchaser" means the purchaser of the Series I Bonds from the City on the Closing Date, which is to be the Authority. "Private Business Use" means use directly or indirectly in a trade or business carried on by a natural person or in any activity carried on by a person other than a natural person, excluding, however, use by a governmental unit and use as a member of the general public. "Proceeds" means the Sale Proceeds, Investment Proceeds and Transferred Proceeds of the Series I Bonds, excluding any amounts actually or constructively received with respect to a Purpose Investment that are properly allocable to immaterially higher yield under Section 1.148-2(d) of the Regulations or to qualified administrative costs recoverable under Section 1.148-5(e) of the Regulations. 1/11/94(1362.4) 5 ORIGINAL "Purpose Investment" means an investment that is acquired to carry out a governmental purpose of the Bonds. "Rebate Certificate" means the certificate executed by an officer of the City as of the Closing Date concerning compliance with the requirements for rebate to the United States pursuant to Section 148 of the Code, as such certificate may be amended or supplemented in accordance with its terms. "Rebate Requirement" means the amount of rebatable arbitrage for the Series I Bonds computed pursuant to Section 1.148-3 of the Regulations and the Rebate Certificate. "Redemption Fund" means the fund established by the Treasurer for the Series I Bonds into which shall be placed any accrued interest for the period from the Bond Date to the Closing Date of the Series I Bonds and all sums received from the collection of reassessments and allocable to the Series I Bonds and of the interest and penalties thereon, all as provided in Section 10 hereof. "Redemption Premium" means the following percentages of the principal amount of the Series I Bonds for the periods indicated: Redemption Date (both dates inclusive) Redemption Premium Closing Date through September 1, 2002 September 2, 2002, through September 1, 2003 September 2, 2003, through September 1, 2004 September 2, 2004, and thereat~er 3% 2% 1% 0% The Redemption Premium will be paid on Series I Bonds redeemed prior to maturity as stated in Section 12 hereof. The Original Purchaser and any subsequent owner of the Series I Bonds may waive any Redemption Premium owing on the Series I Bonds. The Series I Bonds shall not be redeemed in whole until on or after September 2, 2001. "Requlations" means, to the extent applicable to the Series I Bonds, Sections 1.148-0 through 1.148-11, 1.149(b)-1, 1.149(d)-1, 1.149(g)-1 and 1.150-1 of the regulations issued or amended by the United States Treasury Department on June 14, 1993, and any other regulations issued by the United States Treasury Department to implement the provisions of Sections 148, 149 or 150 of the Code, as such regulations may be amended from time to time. "Replacement Proceeds" means amounts as defined and determined under Section 1.148-1(c) of the Regulations. 1/11/94(1362.4) 6 "Resolution" means this Resolution No. ~-9~ , as it may be amended by the Council from time to time. "Sale Proceeds" means any amounts actually or constructively received from the sale of the Series I Bonds, including amounts used to pay underwriters' discount, if any, or compensation and accrued interest on the Series I Bonds (other than pre-issuance accrued interest, if any). "Series I Bond" or "Series I Bonds" means the City of Bakersfield Assessment District No. 86-2 Limited Obligation Refunding Bonds, Series I (Tax Exempt), in an aggregate principal amount of $10,220,000, issued pursuant to the 1984 Refunding Act and this Resolution. Each Series I Bond shall be substantially in the form provided in Exhibit A, which is attached to and made part of this Resolution. The Series I Bonds are expected to be tax- exempt bonds. "Series II Bonds" means the City of Bakersfield Assessment District No. 86-2 Limited Obligation Refunding Bonds, Series II (Taxable), a separate issue of bonds, in the aggregate principal amount of $1,610,000, to be issued by the City pursuant to the 1984 Refunding Act. The Series II Bonds are expected to be taxable bonds. The Series II Bonds are secured by the same reassessment lien as the Series I Bonds and have parity with the Series I Bonds. Said lien is sufficient to pay Debt Service on both series of Bonds. Pursuant to Section 17 hereof, the City has covenanted that any foreclosure action against said lien shall be simultaneous for the Series I Bonds and the Series II Bonds. Pursuant to Section 12 hereof, payments or collections of assessments shall be applied first to Debt Service of the Series II Bonds and then to Debt Service of the Series I Bonds. "Tax-exempt Prior Bonds" means, collectively, all of the following bonds issued by the City: Improvement Bonds, City of Bakersfield, Assessment District No. 86-2, Series A; Improvement Bonds, City of Bakersfield, Assessment District No. 86-2, Series B; and, Improvement Bonds, City of Bakersfield, Assessment District No. 86-2, Series D. Each of the series listed above are in that the interest on each series by the United States of America and of the State of California. "tax-exempt bonds" of the City is exempt from income taxation from personal income taxation 1/tl/94(1~62.4) 7 "Treasurer" means the Finance Director of such other person appointed by the Finance Director the duties of the Treasurer required hereunder. the City, or to carry out "Transferred Proceeds" means transferred proceeds as defined and determined under Section 1.148-9 of the Regulations (or the applicable corresponding provision of prior law). "Yield" means yield computed under Section 1.148-4 of the Regulations for the Series I Bonds and yield computed under Section 1.148-5 of the Regulations for an investment. Calculation of Yield is set forth more specifically in the Rebate Certificate. SECTION 2. List of Reassessments. The reassessments now remaining unpaid are as shown on the list presented to the Council concurrently with this Resolution and are in the aggregate amount of $10,220,000. The Council hereby approves such list. For a particular description of the lots or parcels of land bearing the respective reassessment numbers set forth in the list, reference is made to the reassessment and to the reassessment diagram(s) recorded in the office of the Public Works Director of the City after confirmation thereof by the Council. SECTION 3. Issuance of Bonds. Series I Bonds, in the aggregate principal amount of not to exceed $10,220,000, shall be issued as provided in this Resolution upon the security of the reassessments in accordance with, under and pursuant to the provisions of the Resolution of Intention, this Resolution and the 1984 Refunding Act and the proceedings conducted thereunder. The Series I Bonds shall be issued only in fully registered form in the amount of the Bond Denomination or any integral multiple thereof (except for one Series I Bond, due on September 2, 1994, which will include the amount, if any, by which the principal amount of the Series I Bonds exceeds the largest integral multiple of $5,000 contained in such issue). The Series I Bonds shall mature in the amounts and on the dates and at the rates of interest set forth in the purchase contract for the Series I Bonds, to be entered into by the City and the Authority pursuant to Section 26 hereof. The Series I Bonds shall be numbered consecutively from 1 upward, and shall be payable in numerical order, consecutively, commencing with the lowest number within the maturity. If the Authority acquires the Series I Bonds, one Series I Bond in an amount not to exceed $10,220,000 may be issued to represent all serial bonds; and/or, if term bonds are issued, a separate certificate for each term bond maturity may be issued. SECTION 4. Form of Series I Bonds. The Series I Bonds shall be substantially in the form set forth in Exhibit A. SECTION 5. Pavment of Series I Bonds. The Series I Bonds shall bear interest at the rate not to exceed twelve percent per annum or such higher rate of interest as may be authorized by 1/11/94(1362.4) 8 law at the time of sale of the Bonds as provided in the purchase contract for the sale of the Series I Bonds to the Original Purchaser, payable on each Interest Payment Date. Each Series I Bond shall bear interest from the Interest Payment Date next preceding the date on which it is authenticated and registered, unless authenticated and registered (i) prior to an Interest Payment Date and after the close of business of the fifteenth day of the month immediately preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) prior to the close of business on the fifteenth day of the month preceding the first Interest Payment Date, in which event it shall bear interest from the Bond Date; provided, however, that if at the time of authentication interest is in default, each Series I Bond shall bear interest from the date to which interest has been paid. Each Series I Bond will continue to bear interest after maturity at the rate stated therein, provided it is presented at maturity and payment thereof is refused on the sole ground that there is not sufficient money in the Redemption Fund with which to pay same. If a Series I Bond is not presented at maturity, interest thereon will run only until maturity. SECTION 6. Execution. The Series I Bonds shall be executed on behalf of the City and under its official seal by the Treasurer and by the Clerk, whose signatures shall be manually placed on the Series I Bonds or reproduced by engraved, printed or lithographed facsimile thereof, and the official seal may be placed on the Series I Bonds in like manner. Such signing and sealing shall constitute and be a sufficient and binding execution of each and every Series I Bond. If the Series I Bonds are executed under seal by facsimile, the Series I Bonds shall then be delivered to the Treasurer or the Agent for authentication by the Treasurer or Agent. If any officer whose signature appears on the Series I Bonds ceases to be such officer before the authentication and delivery of the Series I Bonds to the purchaser thereof, such signature shall be as valid as if such officer had remained in office until the authentication and delivery of the Series I Bonds. SECTION 7. Authentication. Only those Series I Bonds which bear thereon the original manual signatures of the Treasurer and the Clerk and the original imprint of the City seal, or the facsimile of such signatures and seal and a certificate of authentication substantially in the form below, manually executed by the Treasurer or the Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Resolution. For series I Bonds bearing a certificate of authentication, such certificate shall be conclusive evidence that the Series I Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Resolution. The 1/11/94(1362.4) 9 certificate of authentication on any Series I Bond requiring authentication shall be deemed to be duly executed if signed by an authorized officer or signatory of the Treasurer or the Agent, but it shall not be necessary that the same officer or signatory sign the certificate of authentication on all the Series I Bonds. 1/11/94(136:~.4) 10 [FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION] This is one of tho Series I Bonds de, scribed in th~ Resolution Providing for Issuance of Refunding Bonds and Awarding Sale of Refunding Bonds referred to herein. [Name Of Authenticating Entity] By: Authorized Representative SECTION 8. Preparation and Delivery of Series I Bonds. The Treasurer is authorized and directed to cause the Series I Bonds to be prepared in accordance with this Resolution and to cause the Series I Bonds to be executed and/or authenticated and delivered to the Original Purchaser, upon receipt of the purchase price therefor and upon the performance of the conditions contained in the accepted offer for the purchase of the Series I Bonds. SECTION 9. Escrow Aqreement and Escrow Fund. A separate Escrow Fund entitled, "City of Bakersfield Assessment District No. 86-2 Limited Obligation Refunding Bonds, Series I (Tax Exempt), Escrow Fund," shall be established for the Series I Bonds pursuant to the Escrow Agreement dated as of the Closing Date, between the City and Bank of America, National Trust and Savings Association, as escrow agent (the "Escrow Agent"). The Escrow Agent shall maintain and account for the Escrow Fund and all monies therein and earnings thereon separately from all other funds and accounts of the Escrow Agent. The Escrow Fund shall be funded with the Sale Proceeds of the Series I Bonds and any other amounts legally available to the City for the refunding of the Tax-exempt Prior Bonds, and shall be applied to the refunding of the Tax-exempt Prior Bonds. Upon receipt of payment for the Series I Bonds when they have been sold by the City, the Treasurer shall deposit with the Escrow Agent, for deposit in the Escrow Fund, respectively, an amount of the appropriate Sale Proceeds which, when added to other amounts deposited therein, is certified by a certified public accountant licensed to practice in California to be sufficient, together with any interest or other gain to be derived from investment of monies in the Escrow Fund, to refund and redeem in full the Tax-exempt Prior Bonds on the earliest date on which they may be redeemed, including payment of principal of, interest accrued to the date of redemption and redemption premiums thereon, if any, all as provided in the Escrow Agreement. Monies in the Escrow Fund shall be invested in Federal Securities, and interest and earnings on shall be allocated to that Escrow Fund. The Treasurer is authorized and directed to execute the Escrow Agreement in such form as the Treasurer deems appropriate, to execute such other documents and to take such other actions as may be necessary or appropriate to accomplish the redemption and 1/11/94(1362.4) 11 refunding of the Tax-exempt Prior Bonds in accordance with the Escrow Agreement and this Resolution. SECTION 10. Costs of Issuance Fund. The Treasurer shall establish a special fund designated as the "City of Bakersfield Assessment District No. 86-2 Limited Obligation Refunding Bonds, Series I (Tax Exempt), Costs of Issuance Fund." The Costs of Issuance Fund shall be kept separate and apart from all other funds and monies of the City. Upon receipt of payment for the Series I Bonds when they have been sold by the City, the Treasurer shall deposit in the Costs of Issuance Fund Sale Proceeds in the amount of $163,884 and other funds, if any, from time to time deposited with the Treasurer for such purpose and so identified in writing to the Treasurer. Monies in the Costs of Issuance Fund shall be disbursed by the Treasurer to pay Costs of Issuance of the Series I Bonds. The Treasurer shall disburse monies from the Costs of Issuance Fund only upon receipt of a sequentially numbered requisition, signed by an authorized representative of the person requesting payment, setting forth the amounts to be disbursed for payment or reimbursement of Costs of Issuance, the name and address of the person or persons to whom the amounts are to be disbursed, and certifying that the amounts to be disbursed are for Costs of Issuance properly chargeable to the Costs of Issuance Fund, together with copies of all receipts, invoices, billings or other documents reasonably necessary or as the Treasurer may reasonably require to verify the foregoing. When all Costs of Issuance for the Series I Bonds have been paid, but in no event later than 180 days from the Closing Date, the Treasurer shall transfer any monies then remaining in the Costs of Issuance Fund to the Redemption Fund for the Series I Bonds to be applied as provided in Section 11. The Costs of Issuance Fund shall then be closed and the City shall no longer be obligated to make payments for Costs of Issuance. SECTION 11. Redemption Fund. The Treasurer shall establish a separate Redemption Fund for the Series I Bonds into which shall be placed any accrued interest for the period from the Bond Date to the date of delivery of the Series I Bonds, funded interest, if any, in an amount not to exceed the maximum permitted by law as of the Bond Date, and all sums received from the collection of unpaid reassessments provided for in Section 12 and allocated to the Series I Bonds, including interest and penalties thereon. From the Redemption Fund, disbursements shall be made to pay the principal or advance redemption price of the Series I Bonds, as applicable, and the interest due thereon. SECTION 12. Collection of Reassessments. The reassessments shown on the list presented to the Council herewith, together with the interest thereon, shall be payable in annual 1/11/94(1362.4) 12 installments corresponding in number to the number of serial and/or term maturities of the Series I Bonds and Series II Bonds issued. An annual proportion of each unpaid reassessment shall be payable in each year preceding the date of maturity of each of the Bonds issued, sufficient to pay the Bonds when due, and such proportion of each unpaid reassessment coming due in any year, together with the annual interest thereon, shall be payable in the same manner and at the same time and in the same installments as the general taxes on real property are payable, and become delinquent at the same times and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the general taxes on real property. All sums received from the collection of the reassessments and of the interest and penalties thereon shall be allocated first to the Series II Bonds and placed in the redemption fund for the Series II Bonds in an amount sufficient to pay the principal of and interest on the Series II Bonds due on the next Interest Payment Date, and then to the Redemption Fund for the Series I Bonds. SECTION 13. Redemption Prior to Maturity. The Series I Bonds will not be redeemed in whole and paid in whole in advance of maturity until on or after September 2, 2001. However, each Series I Bond, or any portion thereof in the amount of the Bond Denomination or any integral multiple thereof, outstanding may be redeemed in part and paid in part in advance of maturity upon any Interest Payment Date in any year by giving at least sixty days notice and by paying the principal amount thereof together with the Redemption Premium plus interest to the date of advanced maturity, unless sooner surrendered, in which event interest will be paid to the date of payment of the principal amount, all in the manner and as provided in the 1915 Act. The Treasurer shall cause to be called for redemption and retire the Series I Bonds upon prepayment of reassessments in amounts sufficient therefor, or whenever sufficient surplus funds are available therefor in the Redemption Fund. In selecting Series I Bonds for retirement, the lowest numbered Series I Bonds of the various annual maturities therein shall be chosen pro rata in such a way that the ratio of outstanding Series I Bonds to issued Series I Bonds shall be approximately the same in each annual maturity, insofar as possible. Within each annual maturity, Series I Bonds shall be selected for retirement by lot. The provisions of Part 11.1 of the 1915 Act shall be applicable to the advance payment of reassessments and to the calling of the Series I Bonds. SECTION 14. Exchanqe. Neqotiabilitv, Registration and Transfer of Series I Bonds. Any Series I Bond, upon surrender thereof at the office of the Agent, together with an assignment duly executed by the registered owner thereof or his attorney or other legal representative in such form as shall be satisfactory to the Agent, may, at the option of such owner, be exchanged for an 1/11/94(1:~62.4) 13 aggregate principal amount of Series I Bonds, equal to the principal amount of the Series I Bond so surrendered and of any Bond Denomination or Bond Denominations. The City shall make provision for the exchange of Series I Bonds at the office of the Agent. In all cases in which Series I Bonds shall be exchanged, the City shall execute and the Treasurer or Agent shall authenticate and deliver at the earliest practicable time Series I Bonds in accordance with the provisions of this Resolution. The Treasurer or the Agent shall keep books for the registration and registration of transfers of the Series I Bonds as provided in this Resolution, which books shall at all times be open to inspection by the City. The transfer of any Series I Bond may be registered only upon such books upon surrender thereof to the Treasurer or Agent together with an assignment duly executed by the owner or his attorney or legal representative in such form as shall be satisfactory to the Treasurer or Agent. Upon any such registration of transfer, the City shall execute and the Treasurer or Agent shall authenticate and deliver in exchange for such Series I Bond a new Series I Bond or Series I Bonds registered in the name of the transferee, of any Bond Denomination or Bond Denominations, and in an aggregate principal amount equal to the principal amount of such Series I Bond(s) so surrendered. All Series I Bonds surrendered in any such exchange or registration of transfer shall forthwith be cancelled by the Treasurer or Agent. The City may make a charge for every such exchange or registration of transfer of Series I Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other charge shall be made to any owner for the privilege of exchanging or registering the transfer of Series I Bonds under the provisions of this Resolution. The City shall not be required to make such exchange or registration of transfer of Series I Bonds during the fifteen days immediately preceding any Interest Payment Date. SECTION 15. Ownership of Series I Bonds. In addition to or as part of the books described in Section 14, the Treasurer shall keep a register in his office showing the series, number, amount, rate of interest and registered owner of each Series I Bond. The person in whose name any Series I Bond shall be registered shall be deemed the absolute owner thereof for all purposes, and payment of or on account of the principal, and the Redemption Premium, if any, of any such Series I Bond, and the interest on any such Series I Bond, shall be made only to or upon the order of the registered owner thereof or such owner's legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Series I Bond, including the Redemption Premium, if any, and interest thereon to 1/11/94(1362.4) 14 the extent of the sum or sums so paid. The Treasurer shall cancel and file each Series I Bond paid in full. SECTION 16. Limited Obligation. The Series I Bonds shall represent and be secured by the reassessments in the same manner as the original unpaid assessments constituted security for the Tax-exempt Prior Bonds. Pursuant to Section 8769 of the 1915 Act, the City has determined that the City will not obligate itself to advance available funds from the City treasury to cure any deficiency which may occur in the Redemption Fund. Such determination shall not prevent the City from, in the City's sole discretion, so advancing funds. SECTION 17. Covenant to Foreclose. The City covenants with and for the benefit of the owners of the Series I Bonds that it will order and cause to be commenced within 150 days following the date of delinquency, and thereafter diligently prosecute, an action in the superior court to foreclose the lien of any reassessment or any installment thereof not paid when due, pursuant to and as provided in Sections 8830 through 8836 of the 1915 Act, provided that the alternative method of tax apportionment (Sections 4701 through 4717 of the California Revenue and Taxation Code) is no longer applied by the City to special assessments for which bonds have been issued pursuant to the 1915 Act, for any reason whatsoever. The City further covenants that for any foreclosure proceedings initiated pursuant to the foregoing, the City shall also simultaneously initiate foreclosure proceedings for the Series II Bonds. Any foreclosure proceedings taken pursuant to this section shall be performed simultaneously with the foreclosure proceedings for the Series II Bonds. SECTION 18. Investment of Funds. Monies in the Redemption Fund shall, whenever practicable, be invested in legal investments for the City under applicable law for the moneys held pursuant to this Resolution at the time when any of such monies are to be invested therein. Any income from or interest on such investments shall accrue to and be deposited in the fund from which the monies were invested, except as otherwise provided in Section 21 hereof and the Rebate Certificate. (a) Nonpurpose Investments. Except to the extent that the limitations on Nonpurpose Investments are avoided by qualifying the investments under a "temporary period" investment exception under the Code, the Regulations and the Certificate re Arbitrage and Hedge Bonds, the Treasurer shall adhere to the following limitations and requirements for Nonpurpose Investments to avoid treatment of the Series I Bonds as Arbitrage Bonds and the loss of the exclusion of interest thereon from federal income tax: (i) At no time during any Bond Year may the amount invested in Nonpurpose Investments with a Yield 1/11/94(1362.4) 15 materially higher than the Yield on the Series I Bonds exceed one hundred fifty percent of the Debt Service on the Series I Bonds for the Bond Year; and (ii) the aggregate amount invested as provided in clause (i) above shall be promptly and appropriately reduced as the amount of outstanding Series I Bonds is reduced. (b) Temporary Period Investments. Gross Proceeds of the Series I Bonds may be invested in Higher Yielding Investments for a temporary period until such Gross Proceeds are needed for the purpose for which the Series I Bonds were issued and/or for temporary investment periods related to Debt Service on the Series I Bonds. Until the Treasurer is otherwise advised, (i) the temporary period for monies in the Escrow Fund shall be ninety days after the Closing Date, and (ii) the temporary period for all other Gross Proceeds of the Series I Bonds, other than Replacement Proceeds (if any) not held in the Redemption Fund and Transferred Proceeds, shall be thirteen months after the date such Gross Proceeds are received. SECTION 19. Non-arbitraqe Covenant. In addition to and without limitation on Section 18, the City covenants that it will not, except as permitted by law, use any portion of the Gross Proceeds of the Series I Bonds directly or indirectly (i) to acquire Higher Yielding Investments, or (ii) to replace funds which were used directly or indirectly to acquire Higher Yielding Investments, and that it will (iii) rebate to the federal government all arbitrage profits (if any), (iv) comply with limitations on the amount of Gross Proceeds of the Series I Bonds that may be invested in Nonpurpose Investments and (v) comply with all of the other provisions of Section 148 of the Code and the Regulations in order to avoid treatment of the Series I Bonds as Arbitrage Bonds subject to federal income taxation by reason of Sections 103(b) and 148 of the Code. The City further covenants that it will make no other use of the Gross Proceeds of the Series I Bonds which, if made at the time of the issuance of the Series I Bonds, would cause the Series I Bonds to be Arbitrage Bonds subject to federal income taxation by reason of Section 148 of the Code. SECTION 20. Certificate re Arbitraqe and Hedge Bonds. The Treasurer is authorized and directed to execute and deliver the Certificate re Arbitrage and Hedge Bonds certifying, on the basis of the facts, estimates and circumstances now in existence and in existence on the issue date of the Series I Bonds, as determined by the Treasurer, that it is not expected that the Gross Proceeds of the Series I Bonds will be used in a manner that would cause such obligations to be Arbitrage Bonds or "hedge bonds" within the meaning of Sections 148 and 149 of the Code. Such certification 1/11/94(1362,4) 16 shall be delivered to the Original Purchaser of the Series I Bonds at the time of delivery of and payment for the Series I Bonds. SECTION 21. Rebate Fund and Rebate Reauirement. Notwithstanding any unrestricted investment during a temporary period, Section 148 of the Code and the Regulations require that the Rebate Requirement be paid to the United States Treasury. The Treasurer shall establish and maintain the Rebate Fund (as defined in the Rebate Certificate) designated by the name of the Series I Bonds and shall deposit in the Rebate Fund the Rebate Requirement as determined and calculated pursuant to the Rebate Certificate, the Code and the Regulations. Monies held in the Rebate Fund are hereby pledged to secure payments of the Rebate Requirement to the United States Treasury, and the City shall pay or cause to be paid to the United States Treasury the Rebate Requirement at the times and in the amounts set forth in the Rebate Certificate. Monies in the Rebate Fund shall be invested in legal investments for the City under applicable law for such monies, and all earnings with respect to such investments will be deposited in the Rebate Fund. SECTION 22. Private Activity and Private Loan Prohibitions. (a) Private Activity Prohibition. The City shall assure that (i) not in excess of ten percent of the Sale Proceeds of the Series I Bonds are used for a Private Business Use if, in addition, the payment of more than ten percent of the principal or ten percent of the interest due on the Series I Bonds during the term thereof is, under the terms of the Series I Bonds or any underlying arrangement, directly or indirectly, secured by any interest in property used or to be used for a Private Business Use or in payments in respect of property used or to be used for a Private Business Use or is to be derived from payments, whether or not to the City, in respect of property or borrowed money used or to be used for a Private Business Use; and (ii) that, in the event that both (A) in excess of five percent of the Sale Proceeds of the Series I Bonds are used for a Private Business Use, and (B) an amount in excess of five percent of the principal or five percent of the interest due on the Series I Bonds during the term thereof is, directly or indirectly, secured by any interest in property used or to be used for a Private Business Use or in payments in respect of property used or to be used for a Private Business Use or is to be derived from payments, whether or not to the City, in respect of property or borrowed money used or to be used for a Private Business Use, then the excess over five percent of the Sale Proceeds of the Series I Bonds used for a Private Business Use shall be used for a Private Business Use related to the governmental use of the Series I Bonds. 1/11/94(1362.4) 17 (b) Private Loan Prohibition. The City shall assure that not in excess of five percent of the Sale Proceeds of the Series I Bonds is used, directly or indirectly, to make or finance loans (other than loans constituting Nonpurpose Investments or loans enabling the borrower thereof to finance any governmental tax or assessment of general application for a specific essential governmental function) to persons other than governmental units. SECTION 23. No Federal Guarantee. The City shall take no action nor permit nor suffer any action to be taken if the result of the same would cause the Series I Bonds to be federally guaranteed obligations within the meaning of Section 149(b) of the Code. SECTION 24. Amendment. Without the consent of the owners of the Series I Bonds, the City may amend this Resolution to add, modify or delete provisions if the same is necessary or desirable, in the opinion of the Bond Counsel, to assure the exemp- tion of interest on the Series I Bonds from federal income taxation, provided that the security interest of the owners of the Series I Bonds is not adversely affected thereby. SECTION 25. Authority of Treasurer. All actions required by this Resolution to be performed by the Treasurer may be performed by the designee thereof or such other official of the City or independent contractor, agent or trustee duly authorized by the Treasurer to perform such action or actions. SECTION 26. Sale of Series I Bonds. The Council hereby approves the sale of the Series I Bonds by negotiation with the Authority. The Treasurer is hereby authorized to negotiate or cause to be negotiated a purchase contract with the Authority for such sale subject to the following terms : (i) the Yield on the Series I Bonds shall not exceed the yield on the Authority's Revenue Bonds, Series 1993B, by more than 1.5 percent; (ii) the annual interest rate on the Series I Bonds shall not exceed twelve percent; (iii) the total discount (inclusive of original issue discount and underwriting discount) on the Series I Bonds, if any, shall not exceed three percent of the aggregate principal amount of the Series I Bonds; and, (iv) the aggregate principal amount of the Series I Bonds shall not exceed $10,220,000. The Mayor of the City, the City Manager of the City and/or the Treasurer are hereby authorized and directed to execute and deliver such purchase contract in the name and on behalf of the City and to execute all other necessary documents in forms approved by Bond Counsel and the City Attorney of the City, and to do all other things necessary to complete the sale and delivery of the Series I Bonds. SECTION 27. LeGal Opinion. The City will furnish the legal opinion of Burke, Williams & Sorensen, Bond Counsel, 1/11/94(1362,4) 18 approving the legality of the proceedings and the issuance of the Bonds. SECTION 28. Appointment of Aqent. The Treasurer is authorized to appoint a qualified financial institution to serve as Agent, and such appointment is at the sole determination of the Treasurer. The City may act as its own Agent, and, until such time as a financial institution is selected, if ever, the City shall serve as Agent for the Series I Bonds. SECTION 29. Certified CoDies. The Clerk shall furnish a certified copy of this Resolution to the Treasurer, the Agent and the Auditor-Controller of the County. III III III III III 1111194(1362.4) 19 I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the City Council of the City of Bakersfield at a regular meeting thereof held on the 12th day of January 1994, by the following vote: AYES: COUNCiLMEMBERS McDERMOTT, EDWARDS, DeMOND, SMITH, BRUNNI, ROWLES, SALVAGGIO NOES: COUNC LMEMBERS .. r'~)F't~ ABSTAIN: COUNCILMEMBERS ~ ~T: OOUNOILMEMBEI:~ Clerk of the Council of the City of Bakersfield APPROVED this l~h day of January 1994 MAYOR of%t~e City of Bakersfield APPROVED AS TO FORM: BURKE, WILLIAMS & SORENSEN, Bond Counsel By: RlcharA H~ COUNTERSIGNED: city of Baker~ield 1/11/94(1362.4) 20 ORIGINAL EXHIBIT A UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF KERN NO. $ CITY OF BAKERSFIELD ASSESSMENT DISTRICT NO. 86-2 LIMITED OBLIGATION REFUNDING BOND, SERIES I (TAX EXEMPT) PRINCIPAL AMOUNT $ BOND DATE REGISTERED OWNER: MATURITY DATE (September 2) INTEREST RATE MATURITY PRINCIPAL Under and by virtue of the Refunding Act of 1984 for 1915 Act Improvement Bonds, Division 11.5 of the California Streets and Highways Code (the "1984 Refunding Act"), the City of Bakersfield, California (the "City"), will, out of the Redemption Fund on the EXHIBIT A 1/6/94(1380.2) A - ] maturity date specified above for the payment of the Series I Bonds issued upon the unpaid reassessments made for the refunding and reassessment more fully described in proceedings taken pursuant to Resolution of Intention No. 1114, adopted by the City Council of the City on January 12, 1994, pay to the registered owner hereof, or registered assigns, on the maturity date stated above, the principal sum shown hereon in lawful money of the United States and in like manner pay interest at the rate per annum stated above, payable semiannually on March 2 and September 2 in each year commencing September 2, 1994. This Series I Bond bears interest from the interest payment date next preceding its date of authentication and registration unless it is authenticated and registered (i) prior to an interest payment date and after the close of business on the fifteenth day of the month immediately preceding such interest payment date, in which event it shall bear interest from such interest payment date, or (ii) prior to the close of business on the fifteenth day of the month immediately preceding September 2, 1994, in which event it shall bear interest from its date, until payment of such principal sum shall have been discharged. Both the principal hereof and redemption premium hereon are payable upon presentation and surrender hereof at the Office of the Finance Director of the City, or its successors, as Transfer Agent, Registrar and Paying Agent (the "Agent"), and the interest hereon is payable by check or draft mailed to the owner hereof at such owner's address as it appears on the registration books of the Agent, or at such address as may have been filed with the Agent for that purpose, as of the fifteenth day of the month immediately preceding each interest payment date. This Bond is the one and only bond representing the City of Bakersfield Assessment District No. 86-2 Limited Obligation Refunding Bonds, issued by the City under the 1984 Refunding Act and that certain resolution titled "Resolution of the City Council of the City of Bakersfield Providing for Issuance of Refunding Bonds and Awarding Sale of Refunding Bonds in Connection With the City of Bakersfield Assessment District No. 86-2 (Series I ~ Tax Exempt)," adopted by the City Council of the City on January 12, 1994 (the "Resolution of Issuance"), in the aggregate principal amount of not to exceed $10,220.00 for the purpose of providing means for paying for the refunding and reassessment described in said proceedings, and is secured by the monies in said Redemption Fund and by the unpaid portion of said reassessments made for the payment of said refunding and reassessment, and, including principal and interest, is payable exclusively out of said Redemption Fund. This Bond is transferable by the registered owner hereof, in person or by the owner's attorney duly authorized in writing, at said office of the Agent, subject to the terms and conditions provided in the Resolution of Issuance, including the payment of certain charges, if any, upon surrender and cancellation of this Series I Bond. Upon such transfer, a new registered Series I Bond or Series I Bonds, of any authorized denomination or denominations, of the same maturity, and for the same aggregate principal amount, will be issued to the transferee in exchange therefor. Bonds shall be registered only in the name of an individual (including joint owners), a corporation, a partnership or a trust. EXHIB1T A 1/6/94(1380.2) A - 2 Neither the City nor the Agent shall be required to make such exchange or registration of transfer of Series I Bonds between the fifteenth day of the month immediately preceding any March 2 or September 2 and such March 2 or September 2. The City and the Agent may treat the registered owner hereof as the absolute owner for all purposes, and the City and the Agent shall not be affected by any notice to the contrary. The Series I Bonds will not be redeemed in whole and paid in whole in advance of maturity until on or after September 2, 2001. However, this Series I Bond, or any portion thereof in the amount of the five thousand dollars ($5,000) or any integral multiple thereof, may be redeemed in part and paid in part in advance of maturity upon any March 2 or September 2 prior to its maturity date, by giving at least sixty days notice to the registered owner hereof and by paying the principal amount thereof plus interest to the date of advanced maturity (unless sooner surrendered, in which event interest will be paid to the dateof payment of the principal amoun0 together with the following redemption premium computed upon the principal amount, or portion thereof, of the Series I Bond to be redeemed: Redemption Date (both dates inclusive) Redemption Premium Closing Date through September 1, 2002 September 2, 2002, through September 1, 2003 September 2, 2003, through September 1, 2004 September 2, 2004, and thereafter 3% 2% 1% O% The City will not obligate itself to advance available funds from the City treasury to cure any deficiency which may occur in the Redemption Fund. This Series I Bond will continue to bear interest after maturity at the rate above stated, provided that it is presented at maturity and payment thereof is refused upon the sole ground that there are not sufficient monies in said Redemption Fund with which to pay same. If it is not presented at maturity, interest hereon will run only until maturity. This Series I Bond shall not be entitled to any benefit under the Act or the Resolution of Issuance, or become valid or obligatory for any purpose, until validly executed and registered in accordance with the Act and the Resolution of Issuance. /// III III 1/6/94(1380.2) EXHIBIT A A-3 IN WITNESS WHEREOF, the City of Bakersfield has caused the Series I Bond to be executed and registered by its Finance Director and by its City Clerk and has caused its official seal to be imprinted hereon all as of , 1994. CITY OF BAKERSFIELD, CALIFORNIA City Clerk Finance Director [S E A L] ASSIGNMENT For value received, the undersigned do(es) hereby sell, assign and transfer unto the within-mentioned Series I Bond and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the books kept for registration hereof with full power of substitution in the premises. Dated: EXItreIT A 1/6/9~,(1380.2) A - 4